August 26, 2006

Will Second Half of '06 Be Huge for Apple?

Although the most die hard of Mac fans were less than enthusiastic about the lack of product introductions at the recently-concluded Worldwide Developers Conference, the media continues to be abuzz about how Steve Jobs and others promised to take on Microsoft's Windows Vista directly, as the operating system release continues to be more about delays, unfulfilled promises and bugs than about real benefits for customers. While we didn't see an update iPod, or an iTunes Movie Store, everybody got the message that Apple, with Mac OS X, is delivering an operating system today that is already well ahead of Redmond's empty promises, while Leopard, coming soon, will take the Mac maker that much further into the lead.

Newsfactor, in a piece titled, "Can the Mac Counter Windows Vista?", says that the real operating system wars are not behind us, but instead are yet to come, and that with Leopard, Apple intends to "present a direct challenge to industry behemoth Microsoft". With the move to Intel processors, and the adoption of the ability to run Windows on the newest Macintoshes, Apple has eliminated any price differences once expected between Macs and PCs, while also pushing their strong television campaign comparing Macs vs. PCs. (Get A Mac archive)

An analyst from Forrester Research mentions in the article, "In many ways, Apple doesn't have to respond to Vista's specific functionality, since Apple is already ahead of it."

But that doesn't stop others from speculating Apple's next moves. Even as other companies make announcements around downloading full-length feature films to PCs, Apple has remained quiet. But nobody expects the company to sit still and let this market pass them by, as they continue to build out their music empire. The Investor's Business Daily says that it's expected Apple would bridge the gap between the Internet and television by introducing both an online movie store, and a set-top box, similar to today's Mac Mini, which would play the films on your television.

In fact, an independent survey stated that "many respondents who were interested in an Apple set-top box showed no interest in set-tops from other companies," meaning the Apple brand, behind the power of the iPod, has come a long way.

While we're huge TiVo fans, we don't see it as the end-all, be-all of options. If Apple could somehow debut a single device to act both as a movie conduit from the Internet to the television, and as our personal video recorder, we would have to give it significant consideration, and I don't imagine we would be the only ones to do so.

If Apple even debuts half of what people expect - a new iPod, a new cell phone, a new set top box, and powers past Vista with Leopard, the next six to twelve months will be very interesting in Cupertino. That's why we're long Apple (AAPL) shares.

Listening to ''Fifteenth Letter of the Alphabet'', by O (Play Count: 6)